Tanya Plibersek (Sydney, Australian Labor Party, Shadow Minister for Human Services, Housing, Youth and Women) Share this | Hansard source

The Families, Community Services and Indigenous Affairs Legislation Amendment (Child Support Reform Consolidation and Other Measures) Bill 2007 is the third in a series of child support legislative reforms. It represents the final part of the government’s 2006 reforms to the child support system. Labor have largely supported these reforms and as a result we support this bill. In the debates on the previous two bills, however, we have expressed our concerns that the government has failed to protect low-income families who may lose income as a result of the changes to the Child Support Scheme. In speaking today on this bill, I note that our concerns have still not been adequately addressed by the government.

The Child Support Scheme was set up in 1988 by the Hawke Labor government and has become a model for other governments around the world. The principle that, after divorce, parents should continue to support their children is very sound. However, over the last five years a number of organisations, academics, experts, members of this House and others have expressed genuine concerns about the scheme. The scheme has not always operated fairly and equitably. The assessment formula has not always produced good outcomes. There were particular issues with collection, arrears and compliance. It has not always been easy to get the money owed by non-custodial parents for the care of their children.

Labor have acknowledged the need for reform to the system but say that reform should not come at a cost for the poorest and most vulnerable people, in particular the 1.1 million children affected by child support and non-custodial parents who are often living in poverty in this country. In fact, custodial parents and their children are often among the poorest groups in our community. They are very vulnerable to changes which affect their income and we are very concerned that any changes in this area will not drive custodial parents and their children into poverty.

The reform process has been lengthy. In 2003 the House of Representatives Standing Committee on Family and Community Affairs tabled its report Every picture tells a story: inquiry into child custody arrangements in the event of family separation. The report dealt with child support and other family separation issues and made 29 bipartisan recommendations. Among its recommendations was the establishment of a ministerial task force to evaluate the Child Support Scheme, including establishing the costs of children’s upbringing after parental separation, recognising different income levels of households and reflecting the costs for both parents of maintaining meaningful contact with their children.

In May 2005, the report of the Ministerial Taskforce on Child Support, known as the Parkinson report, provided the first systematic evaluation of the child support arrangements. It undertook a comprehensive analysis, relying on international research and commissioning modelling to come up with the best possible statistical information on the costs of children. It recommended an overhaul of the formula underlying the child support system that was based on evidence of the actual costs of raising children, shared parental responsibility for those costs and recognition of each parent’s level of care.

Last year, we debated and passed two bills which enacted many of the recommendations of the Parkinson report. Those two bills implemented a new Child Support Scheme, including a new payment formula, changing the ‘capacity to earn’ provisions, increasing the minimum payment and its indexation to the consumer price index, and increasing the amount of child support payment that the non-resident parent can direct to specific purposes.

Certainly, not all of the recommendations of the Parkinson report were adopted. Certainly, the measures in those two earlier bills were not entirely to Labor’s satisfaction, and I have made a number of criticisms in the past about aspects of that legislation. The principal concern raised by the reforms—and this remains my principal concern—is the effect of the new assessment formula on low-income resident parents, particularly those who have children under the age of 12. In all of these debates, we have tried to take a constructive approach to the reforms. It is not my intention, and it is certainly not Labor’s intention, to politicise child support. We acknowledge that it is a very difficult area to get right. However, I remain concerned, and I know many of my colleagues do, about the interaction of taking money from low-income resident parents, particularly those with children under 12, at the same time as we are introducing Welfare to Work reforms and cutting the pay and conditions of the poorest and most vulnerable workers in this country. Those three things working together are set to penalise some of the poorest people in the country and those people who are busy raising the next generation. I am worried about that.

Last week there was a Senate committee inquiry into the bill. The inquiry highlighted the concerns about low-income custodial parents. The report shows that a number of the deleterious effects have not been addressed by the government. The department responsible for child support policy, FaCSIA, gave evidence that the implementation of the reforms is not progressing as smoothly as we might hope. The department had agreed to establish a stakeholder reference group but that group apparently has met just once. The department has very little information about the impact of the new formula and new arrangements on families.

In debates on the child support bills last year, we called for transitional provisions in these bills to soften the blow for those low-income sole parent families. We certainly have not seen any of those transitional arrangements in this legislation. If we put the interests of children first and respect the original intent of the Child Support Scheme, which was to reduce child poverty, Labor would argue that there is a clear responsibility on the part of the government to ameliorate the negative effect of the changes on some of the poorest families in the country.

Today, again, we are debating these measures. Again, we call on the government to look to those most vulnerable parents and children and ensure that they are not penalised, particularly during this transitional period. I note that the ministerial task force in its report urged the same thing. The ministerial task force, on page 261 of its report, said:

... the Government may wish to give consideration to the position of those whose liability or entitlement will vary to a large extent as a result of the recommendations, to avoid causing hardship in the short term.

Certainly, that has not happened. These concerns formed the basis of recommendation 25 of the Parkinson report, which said that the government needed to ‘comprensively consider the management of the transitional issues regarding the implementation of the new formula’. Unfortunately, our pleas regarding some of the poorest families have fallen on deaf ears. No provision has been made to protect those families, particularly the ones on very low incomes. That is why we have moved a second reading amendment in this regard. These are the same families who are, as I said, affected by Welfare to Work changes and the Work Choices legislation. We will be watching very closely this interaction between the new child support legislation, the Welfare to Work changes and Work Choices.

I turn to some of the measures that I am very pleased to see in this legislation. Currently, ongoing child support can only be collected from employers if the payer is a wage or salary earner or they receive a Centrelink payment. This legislation will broaden the agency’s power to issue notices requiring the deduction of child support and the forwarding of that deduction to the Child Support Agency to include cases where the payer is under contract for service arrangements that are effectively substituting for wages. We have heard a lot over recent years about the substantial increase in the number of employees who are employed as independent contractors even when they are employed to all intents and purposes as an employee. Extending the ability of the Child Support Agency to collect in those circumstances is certainly a positive measure.

I turn briefly to the change to the payment of the baby bonus to under-18s. I am pleased to see that the government is paying the baby bonus in 13 instalments to parents under the age of 18. I am sure there are responsible parents out there who are under the age of 18, but I fear that the temptation of a $4,000 lump sum may be too much for some of them. I think it is a more certain thing to pay people over a number of fortnights in order to avoid some of the worst effects that we have heard about in the payment of the baby bonus. Labor has said all along that, in cases where the money is likely not to be used in the best interests of the children, this should be something that we consider.

Labor supports the payment of the baby bonus generally as a good measure for helping parents when they encounter a lot of high costs around the time of the birth of the child. I am generally very sceptical when I hear stories about people living high on the hog on a few thousand dollars of government support at the time of the birth of a child, but there have been too many stories of concern in this area for us to ignore them completely. The stories that were brought to my attention in relation to under-18s and the baby bonus, or more generally younger parents and the baby bonus, were not coming from the usual shock-jock sources; they were coming from youth workers, grandparents and community health nurses—people who have everyday contact with young parents and who want to support them, encourage them and teach them how to be good parents. They were not people who were interested in putting down young parents but people who were concerned that some of the money was not being spent in ways that were particularly useful for very young children. One woman told Today Tonight that her daughter was an ice addict who had seven children and that her daughter had told her, the grandmother, that she had had more children just to get the $4,000 baby bonus for each. On the same program, a 19-year-old mother of three said she had had her children just to get the baby bonus. I do not think this is widespread. I do not think many people are doing it; I think we are talking about tiny numbers. But it breaks my heart to think that any child would be brought into the world for such a reason.

It is easy to discount these reports because we hear them from sensationalist sources that are interested in beating them up because they make good TV or are a good story, but we also have people like Father Chris Riley, who dedicates every day of his life to helping and supporting young people, saying that this payment has been causing ‘children to have children’. They are his words: ‘children to have children’. A Western Sydney youth service reported directly to me that some of their clients saw the $4,000 as a good way to buy a car or, in one case, a purebred dog. A Tasmanian youth worker told me that he knew of young men who were convincing their girlfriends to become pregnant, collecting the baby bonus when the baby was born and then shooting through. Sometimes they were not convincing their girlfriends to become pregnant but, if they became accidentally pregnant, were thinking, ‘Hang on a minute; I can get $4,000.’ A Hawkesbury social worker told me of a young man who had systematically befriended lonely pregnant girls, waited until they had given birth, convinced them to part with their baby bonus and then taken off. He boasted to this social worker that he had done this five times, and he was working on his sixth victim when the social worker chased him off. Again, I do not think we are talking about thousands of cases, but the tragedy of every one of these cases means that we need to take action, and Labor, as I said, has been calling for action in this area for some time.

Domestic violence services report that levels of abuse rise about six weeks after the birth, just when the cheque comes in. Some women are handing over the money just to get rid of a violent partner. These are individual stories, but we need to be aware, when we make these sorts of payments, of the social impact of the payments, even if that impact is on a small proportion of our population. I want to live in a society in which every child is wanted and every child is loved, and in which parents are emotionally ready to cope with this lifelong commitment, the most important job they can have.

I understand that it is difficult to design a system that takes into account the lengths that poorly motivated people will go to. You cannot design a perfect system that is able to prevent the human will to do wrong if that is a person’s intention, but I think this is a positive measure towards reducing this problem. Certainly, I think that more broadly in situations where children are at risk of neglect the baby bonus could be paid fortnightly so that it is more likely to be spent on bills and other child-rearing expenses. A lot of organisations are already dealing with parents whose children are at risk of abuse and neglect and I think we could do more in that area. Taking the ‘jackpot’ effect out of this payment is something positive that may prevent children from being born into really damaging circumstances, so on that basis we support this change.

I will finish by saying that it is important to remember that this payment was introduced with the purpose of increasing the birthrate. There has been a blip in the birthrate, mostly because the cohort of women my age, who delayed childbearing because they were studying and getting a university education and doing all the rest of it, is now having children. Has it had an effect? Maybe. It is difficult to tell. We do know, though, what does work when it comes to increasing the birthrate. If we look at countries overseas with developed economies which have higher birthrates, it is because they have good supports for families. They have paid maternity leave or paid parental leave, they have better systems of child care than we have here and more affordable child care, and they have workplaces that recognise that both parenting and paid work are essential roles. While of course Labor supports this payment for new parents, we think we really need to address those other areas of support for families if we are serious about increasing the birthrate in Australia.

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